According to the Wall Street Journal, Wells Fargo settles shareholder lawsuit for $1 billion, brought by shareholders over its 2016 fake-accounts issue.
The Journal reported Monday night that Wells Fargo WFC, +3.41% settled a class-action lawsuit brought by shareholders who alleged bank executives exaggerated the bank’s progress in improving its risk-management systems and governance in the wake of the disaster. The lawsuit was based on court filings, according to the Journal.
Consumer Financial Protection Bureau
Wells Fargo settles shareholder, has made billion-dollar settlements and fines in connection with the issue. Due to alleged widespread mismanagement, the Consumer Financial Protection Bureau ordered Wells Fargo to pay $3.7 billion in December. In March, a former Wells Fargo executive who was allegedly in charge of the fake-account scheme entered a guilty plea and agreed to a 16-month prison sentence and a $17 million fine.
In contrast to the S&P 500’s SPX, +0.30% 8% increase in 2023 and 3% rise over the previous year, Wells Fargo shares are down 6% year to far and are down 8% over the past 12 months.
Wells Fargo settles shareholder lawsuit for $1 billion: report
Spend billion dollars to settle legal disputes
According to court documents, the San Francisco-based bank denied wrongdoing and agreed to save the stress and expense of a trial. Up to 19% of the settlement cash may be requested by the plaintiffs’ solicitors as legal expenses.
Since 2016, Wells Fargo has spent or set aside several billion dollars to settle legal disputes and regulatory inquiries into its business practises.
These included opening nearly 3.5 million accounts without the consent of the client and charging hundreds of thousands of borrowers for auto insurance they didn’t require.
The 171-year-old bank founded by Henry Wells and William Fargo’s chief executive, Charlie Scharf, has acknowledged that rebuilding its reputation has taken longer than he anticipated when he took over in 2019.
